CRR inaugural results for period to 30 June 2018 exceed IPO forecasts
The financial year 2018 results for Convenience Retail REIT (CRR) were announced this morning. Key highlights included:
- FY18 Funds From Operations (FFO) of 18.5 cents per security (exceeding PDS FY18 forecast of 18.2)
- FY18 Distributions of 18.1 cents per security (exceeding PDS FY18 forecast of 17.9)
- NTA growth of 14 cents per security to $2.87, representing a 5.1% increase since IPO
- Balance sheet gearing of 31.7%, within target range of 25 – 40%
- Sustainable earnings growth – FY19 FFO guidance of 21.3 – 21.7 cps
- FY19 Distribution guidance of 20.9 cps1(7.6% annual cash distribution yield2)
- Active capital management – establishment of on-market securities buy-back program
- Acquired or committed to acquire $27.4 million of earnings accretive properties1 – WACR of 6.9% and WALE of 14.1 years
- $12.8 million or 3.9% increase in portfolio value at June 2018
For full details of the results, please click on the following:
This is Convenience Retail’s first financial year results since listing on the ASX on 27 July 2017. These results reflect an active 11 month period, and we have delivered on what we said we were going to do – exceeding PDS forecasts and demonstrating our ability to grow the portfolio in a disciplined and prudent manner.
During the period CRR acquired or committed to acquire $27.4 million of acquisitions which have enhanced the portfolio and delivered growth to the Fund’s earnings. These four properties in total were acquired individually off-market on an average yield of 6.9% and a combined weighted average lease expiry of 14.1 years.
As at 30 June 2018, the Fund’s balance sheet is in a healthy position with gearing of 31.7%, comfortably within our target range of 25 – 40%. We continue to take an active approach to managing the fund’s capital to create value for securityholders. In this regard, we have reviewed opportunities to source and apply capital including selective property acquisitions and divestments, opportunities to invest across the portfolio to enhance value at the property level, as well as the opportunity to acquire the fund’s own securities having established an on-market securities buy-back program.
Convenience Retail REIT is well positioned, it has sustainable income growth which is underpinned by long term leases with contracted annual rent increases and a prudent level of gearing.
FY19 FFO guidance is 21.3 – 21.7 cents per security, and distributions guidance is 20.9 cents per security (representing a cash distribution yield of 7.6%2).
For further information, please visit our website at www.crreit.com.au or feel free to contact me.
1. Includes the acquisition of Mount Larcom, which is due to settle in September 2018.
2. Based on closing share price of $2.76 on 20 August 2018.